Retail outlets are commonplace hubs for sale or rental of recorded media. These outlets typically have a substantial inventory of optical media, and therefore require a building to house the inventory and provide a location for commerce. In addition, staff is required for sale and/or rental of recorded media, processing of returned media and restocking of returned or new media. These requirements result in considerable overhead to a person or company seeking to run a business that trades in recorded media—for example, wages and rent must be paid regularly.
Some wishing to cash in on the recorded media trade have sought to reduce the aforementioned overhead by offering a limited supply of recorded media at an existing establishment, such as a convenience store. However, as staff is still required for sales, rentals and restocking, others have attempted to reduce overhead associated with the trade of recorded media through electronic commerce (EC). In this type of business model, a customer submits an order for recorded media via the Internet. A central warehouse then ships the ordered media through the mail, or using a private courier. The cost of operating a retail location is avoided with this business model. However, Internet-based distribution systems often have significant liabilities.
One such liability is that a customer must wait for an order to be shipped from a warehouse location. Another disadvantage is that stock may not be available at the time the order is processed. If stock is unavailable, an order may be placed on back-order until the requested recorded media is available, at which time the customer may no longer be interested in the requested media. Alternately, the order may be canceled. Another significant disadvantage of an Internet-based distribution system is the impracticality for media rental. The rental business is one of immediacy; a customer will rent an item that is available immediately, but may not rent if it is not available immediately. A customer is much less likely to rent an item that is shipped after ordering, requiring days for delivery. In addition, once a customer is finished with a rented item, that customer must deal with the inconvenience of return-shipping the media to the distribution location.